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HomeMy WebLinkAboutProvisional Ordinance 1873, BMC 38.23.180, Admin. of Water Adequacy Requirements Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Tim Cooper, Assistant City Attorney Greg Sullivan, City Attorney SUBJECT: Provisional Adoption of Ordinance No. 1873 MEETING DATE: October 21, 2013 AGENDA ITEM TYPE: Action RECOMMENDATION: Conduct a public hearing and provisionally adopt Ordinance No. 1873, adding authority to Section 38.23.180, BMC for the administration of water adequacy requirements. RECOMMENDED MOTION: Having found amendments to Section 38.23.180, BMC are in the public interest, I hereby move to provisionally adopt Ordinance 1873. UPDATE: This ordinance was previously scheduled for hearing and consideration on September 30, 2013. Due to time constraints it was tabled, and continued to this date. Following the September 30 hearing, staff held further discussion on the existing provisions in the current ordinance regarding deferral of water rights or payment-in-lieu. The City has worked recently with various developments to determine the most appropriate methodology for calculating actual demand prior to providing water rights or cash-in-lieu. The ordinance does not currently recognize or specifically authorize this flexibility for commercial subdivisions. We have therefore proposed an additional amendment to Section 38.23.10; specifically subsection C.(5), authorizing deferral of water rights or payment-in-lieu for commercial, industrial and institutional uses. Please see the proposed new subsection highlighted in yellow. BACKGROUND: This ordinance amends Sect. 38.23.180, BMC to add necessary authority to the City Manager and the Public Works Director to administer various issues related to water rights, and require specific standards to govern that administration. The City has been requiring the transfer of adequate water rights or payment in-lieu thereof for many years. During this time, the Commission and staff have worked to refine procedures. 66 Beginning in May 29, 1984, the City Commission adopted Resolution No. 2502, establishing goals and policies for annexation of properties to the City. These included policies regarding the acquisition of useable water rights, or requiring an appropriate fee in lieu thereof, to service new development (see Section 2 of Resolution 2502). In 2008, through Resolution 4095, the Commission established a cash-in-lieu amount. In December, 2010, the City Commission codified policies related to water rights through passage of Ordinance No. 1796, codified at Sect. 38.23.180, BMC. The Commission, through adoption of Ordinance 1796 allowed the City Manager to adopt administrative procedures to implement its provisions. During the development of the Integrated Water Resource Plan, we have reviewed other aspects of the City’s water facilities, including: revisiting and adjusting water demand calculations; examining procedures and standards for the transfer of water rights; factors to be included in establishing the appropriate pricing of the in-lieu fee; standards for the allowance of non-potable water systems for irrigation or other approved uses; and addressing administrative processes to purchase additional water shares/rights. We believe that administrative procedures, adopted by Administrative Order of the City Manager, are needed to provide guidance in administering the water adequacy requirements. As such, we have prepared along with City staff a draft administrative procedure manual which will set forth provisions to address standards to be used for project-specific demand calculations, procedures and standards for accepting water right transfers, a methodology to calculate the fee in lieu of water rights, and authority for distribution of funds. To promote both fairness and flexibility, the manual is proposed to provide options, limitations and specific requirements not currently found in City policy or the municipal code. For example, the manual will address situations where excess water rights may be transferred to the City, or where non-potable water systems may be allowed. The manual also includes a mechanism whereby a person may appeal a determination of the amount of water rights or the payment in lieu if the person believes an error has been made. A draft of the manual is provided as an attachment to this memorandum. Additional work is necessary prior to its adoption by the City Manager. We will present a copy to the Commission upon final adoption by the City Manager. UNRESOLVED ISSUES: None identified. ALTERNATIVES: As suggested by the City Commission. FISCAL EFFECTS: None identified. Attachment: Commission Ordinance No. 1873 67 DRAFT Water Adequacy Requirements Administrative Procedures Manual Report compiled on: September 23, 2013 Updated on: October 14, 2013 68 Ordinance 1873 Page 1 of 5 ORDINANCE NO. 1873 AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, PROVIDING THAT THE BOZEMAN MUNICIPAL CODE BE AMENDED BY ADDING AUTHORITY TO SECTION 38.23.180 FOR ADMINISTRATION OF WATER ADEQUACY REQUIREMENTS. WHEREAS, the City of Bozeman has adopted a Unified Development Code which includes a requirement that development must provide adequate water to meet the demands of the development; and WHEREAS, the City Commission held a public meeting on September 30, 2013, to receive and review all written and oral testimony on the proposed amendments to 38.23.180, BMC; and WHEREAS, at its public hearing on September 30, 2013, the City Commission found the adoption of this Ordinance 1873 would be in the public interest. NOW, THEREFORE, BE IT ORDAINED by the City Commission of the City of Bozeman, Montana, that: Section 1 Section 38.23.180 of the Bozeman Municipal Code be amended so that such section shall read as follows: “Sec. 38.23.180. - Water rights. A. Prior to a final approval of all development reviewed as a site plan, conditional use permit, planned unit development, or subdivision and prior to an annexation of any land, one of the following must occur: 1. Payment shall be made to the city of a payment-in-lieu of water rights calculated based on the annual demand for volume of water the development will require multiplied by the most current annual unit price; or 69 Ordinance 1873 Page 2 of 5 2. The city may elect to accept a transfer to the city of ownership of water rights if the water rights proposed to be transferred are legally and physically adequate as determined by the city to provide the annual volume of water the development will require. A transfer of ownership of water rights must be in a form and manner suitable for municipal purposes and as approved by the review authority. 3. In addition to but notwithstanding the above, a development may propose the installation of non-potable water systems for irrigation or other approved uses. The installation of a non-potable water system may result in a reduction in the payment required under subsection A.1 or amount of water rights under subsection A.2. To receive credit against the water demand calculation the development shall meet all physical requirements for such system as established by the city and shall comply with all applicable administrative requirements. B. If adequate water rights or a payment-in-lieu was previously provided to the city for the subject property, evidence of those rights or payment-in-lieu may be offered to demonstrate compliance with this section. If the expected demand for water by the proposed development increases by more than one acre-foot over that for which water rights or payment-in-lieu of water rights were previously provided, additional water rights or payment-in-lieu of water rights pursuant to subsection A equal to the difference between the previously provided water rights or payment-in-lieu and the estimated current demand or payment-in-lieu price shall be provided. C. Provision of water rights or payment-in-lieu may be deferred: 1. By phase for phased developments. 2. For annexations of vacant land when the annexation is in excess of ten acres. 3. For annexation of parcels of ten acres or less or for any size parcel if development exists on the area being annexed prior to the annexation and provision of water rights or payment-in- lieu pursuant to subsection A is provided at the time of annexation for the uses present on the site at the time of annexation. Subsequent development is subject to the provisions of subsection A. 4. For additional development beyond one dwelling unit per lot for lots zoned residential within a subdivision if water rights or payment-in-lieu is provided pursuant to subsection A prior to final plat for at least one residential unit on that lot. Additional development requires compliance with this section. A notice of restriction on future development in a form acceptable to the City shall be recorded with the Gallatin County Clerk and Recorder prior to the City granting a waiver under this subsection. 5. For commercial, industrial and institutional uses, until final site plan approval or the issuance of any building permit, whichever occurs first. D. The city manager may shall adopt administrative procedures to implement this section. The director of public services works shall adopt standards for the calculation of demand for water use. The unit cost for payment-in-lieu shall be established by commission resolution. The administrative procedures shall include but need not be limited to standards governing acceptance of water right transfers, and a means to establish credits against the transfer of excess rights. The standards governing acceptance of water right transfers may enable a deferral of 70 Ordinance 1873 Page 3 of 5 payment-in-lieu, provided that the party obligated for the payment-in-lieu executes a fee deferral agreement and related documents as approved by the City Attorney to be recorded at the Gallatin County Clerk and Recorder's office securing the amount due. E. The amount paid for a payment-in-lieu shall be calculated using the per unit price in effect on the date the payment-in-lieu of water rights is to be made to the city. The director of public works shall make proper distribution to the funds for which such payments are made of all money collected.” Section 2 Repealer All provisions of the ordinances of the City of Bozeman in conflict with the provisions of this ordinance are, and the same are hereby, repealed and all other provisions of the ordinances of the City of Bozeman not in conflict with the provisions of this ordinance shall remain in full force and effect. Section 3 Savings Provision This ordinance does not affect the rights and duties that matured, penalties that were incurred or proceedings that were begun before the effective date of this ordinance. All other provision of the Bozeman Municipal Code not amended by this Ordinance shall remain in full force and effect. Section 4 Severability That should any sentence, paragraph, subdivision, clause, phrase or section of this ordinance be adjudged or held to be unconstitutional, illegal, or invalid, the same shall not affect the validity of this ordinance as a whole, or any part or provision thereof, other than the part so decided to be invalid, illegal or unconstitutional, and shall not affect the validity of the Bozeman Municipal Code as a whole. Section 5 Codification The provisions of Section 1 shall be codified as appropriate in Chapter 38 of the Bozeman Municipal Code. Section 6 Effective Date This ordinance shall be in full force and effect thirty (30) days after final adoption. 71 Ordinance 1873 Page 4 of 5 PROVISIONALLY PASSED by the City Commission of the City of Bozeman, Montana, on first reading at a regular session held on the _______ day of _______, 2013. ____________________________________ SEAN A. BECKER Mayor ATTEST: _________________________________ STACY ULMEN, CMC City Clerk FINALLY PASSED, ADOPTED AND APPROVED by the City Commission of the City of Bozeman, Montana on second reading at a regular session thereof held on the ____ day of ________________, 2013. The effective date of this ordinance is __________, __, 2013. ____________________________________ SEAN A. BECKER Mayor ATTEST: _______________________________ STACY ULMEN, CMC City Clerk APPROVED AS TO FORM: ____________________________________ GREG SULLIVAN City Attorney 72 Admin Order 2013-XX Page i of 9 WATER ADEQUACY REQUIREMENTS ADMINISTRATIVE PROCEDURES MANUAL CITY OF BOZEMAN, MONTANA DRAFT September 23, 2013 74 Admin Order 2013-XX Page ii of 9 WATER ADEQUACY REQUIREMENTS ADMINISTRATIVE PROCEDURES MANUAL CITY OF BOZEMAN, MONTANA I. PURPOSE II. DEFINITIONS III. DEMAND CALCULATION METHODOLOGIES IV. WATER RIGHT TRANSFERS V. CASH IN LIEU OF WATER RIGHT TRANSFERS VI. USE OF FUNDS VII. COLLECTION OF FEES VIII. APPEALS 75 Admin Order 2013-XX Page 1 of 9 WATER ADEQUACY REQUIREMENTS ADMINISTRATIVE PROCEDURES MANUAL CITY OF BOZEMAN, MONTANA I. PURPOSE This document shall be referred to as the Administrative Procedures Manual, hereinafter known as the "Manual." The following administrative procedures contained in this Manual are intended to provide guidance to staff in administering the Water Rights Ordinance, codified in Chapter 38, Article 23 of the Bozeman Municipal Code, hereinafter known as the "Ordinance" as it may be amended from time to time. This manual shall be adopted by administrative order by the City Manager. The purpose of the Water Rights Ordinance is to obtain water rights to support new development within the city’s urban growth area (includes areas within the existing city limits and areas outside the city limits and within the city’s approved urban growth area). This purpose shall be achieved through the transfer of water rights to the city or the payment of fees to the city to be used to acquire additional water rights. The purpose for requiring a transfer of water rights or payment in lieu thereof is to enhance the public health, safety, and welfare through a provision designed to enable the city to meet the future water supply needs of property within the city’s urban growth area. II. DEFINITIONS In addition to the above and to terms and phrases defined in the Ordinance, the following terms or phrases are defined for use in this manual: [insert definitions] III. DEMAND CALCULATION METHODOLOGIES The amount of water rights to be transferred to the city shall be equal to the average annual diversion requirement necessary to provide the anticipated average annual water demand of residents and/or users of the property when fully developed. (Res. 4095, 2008: Res. 3907, 2006: Ord. 1839, §1, 2012: 38.23.180, BMC). A. Residential Uses. Water demand and cash in lieu of water rights for residential uses are calculated on the basis of an average residential unit. Average residential water demand values are derived from detailed analysis of city water billing records covering the period 2000 – 2010 in conjunction with analysis of the City’s GIS database and MT Dept of Revenue building database. 76 Admin Order 2013-XX Page 2 of 9 1. Average Single-Household Residential Unit Basis: Single- household residential includes any living unit situated upon its own individual parcel (detached single-household structures, and attached townhouse structures). Single-household residential demand = 0.234 AF/yr/SH unit 2. Average Multi-Household Residential Unit Basis: Multi-unit residential includes multiple living units situated upon a parcel held in common ownership or shared use (condominium structures, and apartment structures). Multi-household residential demand = 0.124 AF/yr/MH unit B. Commercial, Industrial and Institutional (CII) Uses. Water demand and cash in lieu of water rights for CII uses will be calculated on the basis of comparable account water usage from city billing records, or on the basis of a detailed accounting of water-using fixtures and devices. The city and developer shall agree on the appropriate methodology prior to the developer providing water rights or cash in lieu. 1. Comparable Water Usage Basis: The city and developer will cooperate to determine a mutually agreeable list of at least five comparable water accounts from city billing records. The list will be considered final. The City will then query these billing records for a minimum period of three years and for each account will determine an annual average water demand per square foot of commercial building space, or other appropriate demand unit. The high and low unit demand values will be dropped and the remaining values averaged and applied to the proposed/existing building area to calculate the annual average water demand in units of acre-feet. In the event less than five comparable accounts exist with at least three years of billing records then the average of these accounts will be used without dropping the high and low values. Cash in lieu payment shall be provided or guaranteed prior to final development pproval. 2. Detailed Accounting Method: The developer may provide a detailed report documenting anticipated annual average water demand in acre-feet for review by the city. The report shall be certified by a professional engineer or registered architect. All sources referenced in the report shall be cited appropriately and provided as attachments to the report. The developer will provide water rights or cash in lieu only after the city has accepted the report and prior to final development approval. The city may require as a condition of report acceptance that the developer enter into an agreement wherein actual water use will be monitored for a specified period of time in order to determine if additional cash in lieu is necessary and if so, additional payment will be made within six (6) months of notice by the city. C. Subdivision Parkland and Open Space. Water demand and cash in lieu of water rights shall be provided for subdivision parkland and open space that is irrigated using the city’s domestic water supply. The developer will provide a detailed report documenting projected annual water demand in acre-feet for review by the city. The report shall be certified by a professional engineer or registered landscape architect. All sources referenced in the report shall be cited appropriately and provided as attachments 77 Admin Order 2013-XX Page 3 of 9 to the report. The developer will provide water rights or cash in lieu only after the city has accepted the report and prior to final development approval. The city may require as a condition of report acceptance that the developer enter into an agreement wherein actual water use will be monitored for a specified period of time in order to determine if additional cash in lieu is necessary. D. Non-Potable Water. A development may propose the installation of non- potable water systems for irrigation or other approved uses. The installation of a non- potable water system may result in a reduction in the water demand calculation for that development. To receive credit against the water demand calculation the developer must: 1. 2. 3. IV. WATER RIGHT TRANSFERS A. Types of Water Rights. The various types of water rights subject to the Ordinance and this Manual include, but are not necessarily limited to, the following: Provisional Permits, Groundwater Certificates, Exempt Rights, Shares of irrigation companies or water user associations, Statements of Claim, Reserved Claims, and Water Reservations issued by or on file with the Montana Department of Natural Resources and Conservation (DNRC). Prior to transferring any water right into city ownership for purposes of satisfying the Ordinance, the Public Works Director shall determine if the water right is adequate for city purposes based on written analysis of the City Engineer and City Attorney. The Public Works Director’s decision shall be final unless a timely appeal is filed pursuant to Section VIII of this Manual. The Public Works Director may, and at their discretion, accept a fee simple transfer of the water right directly as is; or, prior to fee simple transfer, may require a water right to complete a change application process with the DNRC pursuant to this Section. The determination of whether the water right is adequate for city purposes shall be based upon, but not necessarily limited to, the below-listed factors. 1. Max flow rate, max volume, and max area of use; 2. Type of source, means of diversion, means of conveyance; 3. Priority date, purpose of use, point of diversion, place of use, period of use, and period of diversion; 4. Legal status of the water right, including documentation of all adjudication proceedings concerning the water right and status of any issue remarks of the water court[e.g. status in Preliminary Temporary Decree for the Gallatin River Basin (Basin 41H)]; 5. History of any calls made on the water right by senior appropriators, and identification of whether the right is subservient to other rights at the place of use; 6. Physical availability of water at the water right's point of diversion and place of use; 7. Evidence of historic use including, but not necessarily limited to: most recent 78 Admin Order 2013-XX Page 4 of 9 year the water right was used; max and min flow rate of historic diversions; max and min volume of historic diversions, and max and min consumptive volume; 8. Feasibility of changing the water right to city's existing point(s) of diversion, for use in the city's water service area, for municipal water supply purposes including analysis of adverse effect to existing water rights by changing the point of diversion.; and 9. Clear ownership of the water right and ability to convey clear title and ownership to the city. B. Form of transfer and conveyance of water right. The transfer of water rights pursuant to the Ordinance and this Manual shall be in such forms as may be approved by the city. The Public Works Director, at their discretion, may require a direct transfer of the water right as is, or may require a DNRC change application be completed before accepting the transfer. The applicant shall execute all documents required by the city and/or any other governmental entity that may be necessary to achieve the purposes of the Ordinance and this Manual. The applicant will diligently pursue approval of the water right transfer and shall, at its sole expense, be responsible for preparing applications and documents to complete the transfer. Those documents may include, but are not limited to, DNRC change applications, deeds to transfer fee simple title of the water rights, DNRC water rights ownership update forms, and any other documents or forms determined necessary. 1. In the event the volume of water represented by the water right transfer, or resulting volume of the water right after completion of a DNRC change application, is less than the annual average water demand required to serve the fully- developed property, the applicant will transfer adequate supplemental water rights or cash in lieu thereof to the city to provide for the deficiency prior to final development approval. C. Changed Water Right Transfer Option. If the Public Works Director requires the water right to complete a DNRC change application prior to accepting the transfer, the applicant shall have eighteen months from the date of preliminary development approval to file a correct and complete change application(s) with the DNRC, and 3 years to complete the transfer of water to the city. The applicant shall cause the legal transfer of the water to the city including the execution of any necessary document(s), form(s), or request(s) in accordance with any applicable and governing documents or laws. In the event the transfer has not been completed within the three year term provided, the applicant will provide cash in lieu unless a contested case hearing has been initiated. 1. Change Application. Prior to filing any change application with the DNRC, the applicant shall provide written notice and a copy of the proposed application to the city, which shall have no less than ten full working days prior to the application being filed to provide written comments concerning the content and sufficiency of the proposed change application. The city agrees to execute and deliver, without additional consideration, any instruments and documents, and to take such further actions as applicant or the DNRC may request and as may be necessary in order to complete the 79 Admin Order 2013-XX Page 5 of 9 change application. Under no circumstance, including failure by the city to submit comments as provided for herein, shall the act of filing change application(s) be construed as satisfying the transfer requirement for development approval. 2. Prior to final development approval, and if the water right has not completed the DNRC change application process within the 3-year term provided, the applicant shall execute all necessary documentation to allow an assessment to be placed against the property such that the balance of the cash in lieu amount owed shall be a lien upon the property and invoiced and paid through the Gallatin County offices in the same manner as other municipal assessments against the property. D. Direct Water Right Transfer Option. The applicant must convey fee simple title of the water right to the city by appropriate conveyance instrument, as determined by the city. If required, cash in lieu shall be provided to cover any volume deficit prior to final acceptance of the transfer. E. Excess Water Rights. To the extent the water rights associated with the subject property exceed the anticipated annual average water demand for the fully developed property as determined pursuant to Section III, the city and the applicant may agree as follows with respect to any such excess water rights: (1) to transfer any amount of the excess water rights to the city and, in exchange, the city shall pay the applicant for the excess water rights to be transferred to the city an amount of money agreed upon by the city and the applicant; or (2) to transfer the excess water rights to the city in exchange for credits associated with water provided through the city’s domestic water system to be applied to other property owned by the applicant within the city’s approved urban growth area, subject to the provisions of this Manual. In the event the excess water rights are transferred to the city, the transfer will be processed simultaneously with, and as a part of, the transfer process outlined in this Section. The intent of this subsection is to provide the city means to acquire excess water rights that are no longer needed by the applicant. F. Payment of Costs. The applicant shall pay the city for all costs associated with (1) the city’s determination and evaluation of the anticipated water demand and usage for the subject property, and (2) completing the transfer of the water rights to the city consistent with this Section. The term “costs” as used in this subsection shall include, but is not limited to, city staff time, engineering fees, consultant fees, attorneys’ fees, application fees, publication fees, and any other fees or charges associated with processing and recording the transfer of water rights. V. CASH IN LIEU OF WATER RIGHTS A. Cash in Lieu. In the event: (1) no water rights are associated with the property; or (2) the Public Works Director determines the water rights associated with the property are not adequate for transfer; or (3) the Public Works Director determines the water rights to be transferred to the city are unable to supply the entire anticipated average annual water demand for the fully developed property; or (4) in the case of redevelopment, where anticipated average annual water demand is one acre-foot or more greater than historic demand, then the city shall require the owner(s) of the subject 80 Admin Order 2013-XX Page 6 of 9 property pay to the city cash in lieu of water rights based on the demand methodologies set forth in Section IV below. B. Water Demand and Cash in Lieu Unit Cost. The calculation of average annual water demand shall be expressed in units of acre-feet per year and shall be based on certain assumptions about water use, including but not limited to, average annual demand determined from water billing records. The calculation of the cash in lieu fee shall be the annual average water demand multiplied by a unit cost value established by City Commission Resolution. C. Cash in lieu for single-household residential units shall be provided prior to final development approval. Cash in lieu for newly platted multi-household residential parcels shall be provided in accordance with Sec. 38.23.180.C.4 Unified Development Code prior to final plat approval. Cash in lieu for subsequent development of platted multi-household parcels shall be provided prior to final development approval with credit given for prior payment. VI. USE OF FUNDS A. Payments made by the city. All money paid by the city to water right owners pursuant to the application of the Ordinance and this Manual shall be paid by the city water fund. Any water rights purchased pursuant to the Ordinance and this Manual shall become assets of the city domestic water utility and part of the city’s water system. B. Payments received by the city. All money paid to the city pursuant to the Ordinance and this Manual shall be paid to the city water fund. All money paid to the city pursuant to the Ordinance and this Manual shall be used by the city water utility for the following purposes: (A) purchase of water rights and to process applications for new water rights for the city to be added to the city domestic water utility system; and (B) alternatively, to the extent permitted by the laws of the State of Montana, the city may, but is not required to, use the money deposited into the city water fund pursuant to this chapter to finance water conservation measures that enhance the efficiency of the city’s municipal water system. VII. COLLECTION OF FEES VIII. APPEALS Any determination committed to the Public Works Director will be reviewed by the City Manager; provided the affected applicant serves a written notice to the city requesting the review within fourteen business days of the issuance of the written determination of the Public Works Director. If a written notice requesting review is not timely served upon the city, then the Public Works Director’s determination shall be the final decision of the city. If a written notice requesting review is timely served on the city, the City Manager shall review the determination of the Public Works Director and issue a final decision within twenty calendar days of the service of the notice requesting 81 Admin Order 2013-XX Page 7 of 9 review on the city. Any final decision within the limited scope of this subsection may be appealed for abuse of discretion by filing an appeal in the Eighteenth Judicial District Court, Gallatin County, Montana within twenty-one calendar days of the date of the final decision. 82